can somebody please explain me activity based costing from the scratch
thanks
thanks
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APMactivity based costing
ah you can think simple like that:
you produce a product A included DM, DL, FOH. so traditionally you know exactly how much DM and DL for product A but FOH you can not so you allocate base on propotion of DM or Dl ----> it is traditional management accounting.
ABC is different, you will find detailed cost drivers to allocate such as dep expense is value of FA used for product A, electric expense is Kilowat used for product A, factory rental is m2 used for products A, head of department is number of hrs involved in product A...
you see the different between 2 method and find the ad and dis between 2 methods
gluck
you produce a product A included DM, DL, FOH. so traditionally you know exactly how much DM and DL for product A but FOH you can not so you allocate base on propotion of DM or Dl ----> it is traditional management accounting.
ABC is different, you will find detailed cost drivers to allocate such as dep expense is value of FA used for product A, electric expense is Kilowat used for product A, factory rental is m2 used for products A, head of department is number of hrs involved in product A...
you see the different between 2 method and find the ad and dis between 2 methods
gluck
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